Correlation Between First Investors and Optimum Small-mid
Can any of the company-specific risk be diversified away by investing in both First Investors and Optimum Small-mid at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining First Investors and Optimum Small-mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Investors Growth and Optimum Small Mid Cap, you can compare the effects of market volatilities on First Investors and Optimum Small-mid and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in First Investors with a short position of Optimum Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Optimum Small-mid.
Diversification Opportunities for First Investors and Optimum Small-mid
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Optimum is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Growth and Optimum Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Small Mid and First Investors is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on First Investors Growth are associated (or correlated) with Optimum Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Small Mid has no effect on the direction of First Investors i.e., First Investors and Optimum Small-mid go up and down completely randomly.
Pair Corralation between First Investors and Optimum Small-mid
Assuming the 90 days horizon First Investors Growth is expected to generate 0.79 times more return on investment than Optimum Small-mid. However, First Investors Growth is 1.26 times less risky than Optimum Small-mid. It trades about 0.36 of its potential returns per unit of risk. Optimum Small Mid Cap is currently generating about 0.19 per unit of risk. If you would invest 1,437 in First Investors Growth on October 20, 2024 and sell it today you would earn a total of 75.00 from holding First Investors Growth or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Investors Growth vs. Optimum Small Mid Cap
Performance |
| Timeline |
| First Investors Growth |
| Optimum Small Mid |
First Investors and Optimum Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Investors and Optimum Small-mid
The main advantage of trading using opposite First Investors and Optimum Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Investors position performs unexpectedly, Optimum Small-mid can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Optimum Small-mid will offset losses from the drop in Optimum Small-mid's long position.| First Investors vs. Optimum Small Mid Cap | First Investors vs. Optimum Small Mid Cap | First Investors vs. Ivy Apollo Multi Asset | First Investors vs. Optimum Fixed Income |
| Optimum Small-mid vs. Guggenheim High Yield | Optimum Small-mid vs. Msift High Yield | Optimum Small-mid vs. Jpmorgan High Yield | Optimum Small-mid vs. Buffalo High Yield |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |